Searching for shale gas answers

George Mitchell's best-known legacies are the hydraulic fracturing strategies that he perfected over decades in developing the Barnett Shale play around Fort Worth, Texas.

Now the family-guided foundation of Mitchell, who died in July at the age of 94, is seeking to add to his legacy by tackling the critical climate and environmental issues surrounding the accelerating shale gas development that Mitchell pioneered. The questions at the top of its agenda are:

Is the surge of low-cost shale gas production undermining renewable energy and energy efficiency investments, or will increased gas production be a bridge to less carbon-intensive energy?

How damaging are fugitive methane emissions from shale gas operations, and how can they be minimized?

How can oil and gas regulation in Texas be updated to keep pace with hydraulic fracturing and deep horizontal drilling on which shale gas development depends?

Mitchell, who sold his exploration and production company in 2001 to Devon Energy Corp. for $3.5 billion, will have left between $700 million and $1 billion to the Cynthia and George Mitchell Foundation to fund its research and analysis agenda, says foundation President Katherine Lorenz, his granddaughter.

In an interview, Lorenz said the foundation has positioned itself between environmental organizations that oppose any shale gas development and industry members that push back against regulatory restrictions of any kind.

"My grandfather was always a big proponent of tighter regulation on shale gas development. He always knew there were environmental risks and thought they could be contained," she said. The prospect of dramatically increased gas production should not be at the expense of the environment, she added.

"Previously, a lot of philanthropists were focused on moving away from coal. We started thinking, if not coal, what?" said Lorenz, who also sits on the board of the Environmental Defense Fund. Gas is cleaner than coal, but it is still a hydrocarbon. "The only big question is... can we assure gas is a bridge fuel to a more renewable future, not a bridge to nowhere?"

Focus on gas sustainability

Two years ago, Mitchell admonished family members at a board meeting of his foundation to establish a program on sustainable gas development. Of course he was interested in the future of natural gas, said Marilu Hastings, the foundation's sustainability program director.

"But he had an equal or greater commitment to issues of sustainability," she added. That goal required that shale gas production contribute to a cleaner, lower-carbon energy future.

"He was interested in establishing a program that married those two interests of shale development and sustainability together," she said.

The foundation's natural gas sustainability program has funded an analysis of contesting studies of the oil and gas industry's fugitive methane emissions, Hastings said.

The foundation engaged Novim, a research group associated with the Kavli Institute for Theoretical Physics at University of California, Santa Barbara, to review 20 years of methane emissions research. The goal, Hastings said, "is to understand as funders, decisionmakers and community members why we don't know more about methane leakage." 

The issues include variations in the methods of measuring and estimating emissions, which may tilt results in one direction or another, she said. Analysis may point to particular areas of pipeline operations most vulnerable to fugitive methane leaks if operators' procedures break down, she added, and that could be the focus for more stringent controls.

"Why are there such discrepancies about the methane leakage rate?" Lorenz said. "If we can understand the leakage rate, we can answer whether gas is a better fuel than coal from a greenhouse gas emissions standpoint."

A second project addresses how wind power and gas-fired generation can work better together, taking policy, regulations and technology into account, Lorenz said.

"Could there be reliability issues that could give wind a black eye? It depends on who you ask," Hastings said. "The coal guys certainly say so. [They say] wind and solar are too intermittent; unless you have storage or unless you have backup, you're going to have times during peak demand where there will be blackouts, or at least problems. It's out there in the world as a problem." The issue "needs more work," Hastings concluded.

"You want as much renewable power as you can get, and you want it to be reliable, so you depend on gas that is responsibly produced," Hastings said. "We need gas to back up wind. It's just true. We want to see how the two fuels can be better integrated so they are predominant resources in Texas."

The foundation hired the Texas Clean Air Coalition and the Brattle Group to analyze what happens to renewable power, natural gas and coal generation, now and in the future, depending on assumptions about energy prices, a carbon price, state incentives for renewables and other factors, Hastings said. That report is also due by the year's end.

It was at Mitchell's urging at the board meeting two years ago that the foundation commissioned a review of Texas regulations on shale gas production. "There is a desire to have a level playing field, so that if you have regulations on the books, everybody should play by the rules," Hastings said. That's not going to happen without a robust regulatory structure, she added.

"There are big operators, small operators, and there are wildcatters," Hastings said. As Mitchell said, he put some of the blame on the wildcatter mentality. He wanted the industry to reach a level of maturity and self-control so that there would be a consistency in compliance across all sizes of producers.

Fighting to 'get it right'

Lorenz said the foundation's approach reflects Mitchell's personal values, which she experienced firsthand.

Mitchell, the son of a Greek immigrant, worked his way through Texas A&M University to become an oil and gas developer. His father, Savvas Paraskevopoulos, found work on railroads in the United States, but at one, he was threatened with the loss of his job by a paymaster who struggled to say his name. Mitchell's father asked the man what his name was and took the man's name, Mike Mitchell, as his own.

When others in the industry gave up on finding ways to extract gas from dense shale seams, George Mitchell persevered, eventually arriving at his fracking strategy of injecting high-volume, high-pressure mixtures of water, sand and chemicals into shale formations to open fissures for gas and oil to pass. Mitchell chose not to patent his solution, often saying that he was a billionaire already and would leave his intellectual property to others in the industry in order to boost U.S. gas and oil, associates say.

Lorenz and Hastings say the foundation's focus on what it considers to be fact-based solutions has been met with criticism, notably from some environmental groups that oppose shale gas development outright. "I've been called a spy for the natural gas industry," Hastings said. "I've not been allowed to attend some meetings."

"Part of the problem is, it is such a polarizing issue in the country, so it's sometimes hard to have conversations to move it forward. There isn't a strong middle ground," Lorenz said. "It's a very complex problem; not as simple as 'yes or no,' 'get it right or don't.' What does 'get it right' even mean?

"We don't pull any punches on what we think needs to be done in Texas," Hastings said. "We're trying to solve real problems in a way that is beneficial to clean energy and the environment. That’s what we do."

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